It is not surprising that teaching unions are objecting to the proposed 2% pay rise for England’s top teachers. Unions have long protested against performance-based pay for teachers and now they pose another barrier to the School Teachers Review Body. In the STRB's latest submission (pdf) to the government, highlighted is the need for a wages increase to encourage the desired competition in the teaching profession.

Arguments against pay incentives are that they encourage ‘teaching to the test’ and orchestrated cheating by teachers and schools. Performance gains are accepted to exist but said to be short-lived. While the long-term benefits, they say, are non-existent and there may even be damage done in the long-run.

But the latest research examining their impact on pupils demonstrates the opposite as being true. Pay for performance schemes are becoming increasingly implemented and contemplated in many developed and developing countries and have re-emerged at the top of the policy agenda in the U.S. They are not just a brilliant way of distinguishing the strivers from the shirkers in schooling systems. Such schemes are reaping good long-term labour market outcomes, too.

Research (pdf) published last month by Victor Lavy looks at a study conducted a decade and a half ago in Israel to determine if there are improvements to future education enrolment, earnings and probability of claiming unemployment benefits.

The study is the first of its kind to follow students from high-school to adulthood to examine the impact of a teachers’ pay for performance scheme on long-run life outcomes. It found:

A decade after the end of the intervention, treated students are 4.3 percentage points more likely to enrol in a university and to complete an additional 0.17 years of university schooling, a 60 percent increase relative to the control group mean. The road to higher university enrolment and completed years of schooling was paved by the overall improvement in high school matriculation outcomes due to the teachers’ intervention.

So merit-based pay actually improves students' lifetime well-being, judging by school attainment, annual earnings and welfare-dependency, as well as recognising the hardworking, high-flying teachers and making it a more attractive profession.

If we could achieve a similar flexibility in what the best teachers can be paid in the UK, like proposed in the STRB's report, it would mitigate the pressures being faced by schools experiencing increasingly competitive graduate labour markets, tightening budgets and demographics driving up pupil numbers.

A difficulty in recruiting NQTs and experienced classroom teachers in this country has been identified by head teacher unions. A key cause being that salary progression is faster for able graduates in other professions, with the opportunity to reach higher levels of earning as their careers progress, than for the teaching profession.

Ideologically-driven unions are the main enemy of change as they still make it difficult to get rid of timeserving teachers and are hostile to the ambitious reformers in schools and policy-making. It is time to start thinking about the market value of teachers’ talents and penetrate the dogmatic ‘blob’ that the old hat education establishment represents.